A Queensland-based mining services company turning over more than $26 million has collapsed, as businesses are starting to feel more pressure due to the fading mining boom.
Receivers and managers John Grieg and Richard Hughes from Deloitte were appointed in late July to manage the Rockhampton business Mining Equipment Maintenance.
MEM is a maintenance and service company providing product offerings across heavy engineering, fabrication, structural and mechanical repairs and field services. Having been established for 13 years, MEM is a well-known employer in the region.
The company’s parent company, the DPSA Group, was reported by the Rockhampton publication The Morning Bulletin to also be in receivership. The same report also claimed nearly 100 jobs have been lost.
SmartCompany contacted the DPSA Group regarding this announcement, but was referred to receiver John Grieg from Deloitte. Grieg was unavailable prior to publication.
MEM currently has $2.6 million worth of orders and open quotes equating to $4.6 million.
DPSA Group has been ranked by BRW as one of the biggest businesses in Queensland – in 2007 it ranked 20th on BRW’s Fast 100.
The company acquired MEM in 2008 and it employs around 250 people across Australia.
MEM is just the latest in a long list of mining product and services businesses to collapse, as increasingly mining companies are hesitant to commit to new projects.
In May, the federal Bureau of Resource and Energy Economics released a report which found a significant decline in committed projects in the resources sector and this number is likely to continue declining over the next five years.
Current total investment in committed resources and energy projects is $232 billion across 73 projects, but by 2018 the amount invested in resources projects is tipped to plummet to just $25 billion.
A Productivity Commission report published in April also found there has been a fall in the number of micro businesses in mining-heavy states.
In March this year, Bowditch & Partners Earthmoving fell into receivership blaming the slowdown in the coal mining sector.
Bowditch, which operated a mining equipment, machine hire and earthmoving service in New South Wales, was victim to the “cyclical” coal cycle, according to company receiver Morgan Kelly from Ferrier Hodgson.
In June last year, a West Australian mining services business, Robinsons Welding, collapsed into receivership despite operating since 1908.
SmartCompany also contacted MEM general manager Dave Henderson, but received no response prior to publication.